A better fix for CGT

February 26, 2026

Realised capital gains should be taxed at similar rates to wages, with the CGT discount abolished. Modern digital record-keeping makes this feasible.

For individuals, the government could declare an annual inflation rate (using CPI or AWE) to calculate the real gain. The tax payable would then be based on the taxpayer’s average tax rate over the previous five years – a figure easily recorded on annual assessments.

Companies and discretionary trusts should pay the company rate, which should not be cut.

Negative gearing on residential property should be abolished. Where expenses, including interest, exceed income, these losses should be quarantined and used as a deduction against the capital gain only when the property is sold.

While Bob McMullen is correct that reform is needed, piecemeal adjustments are insufficient. The CGT discount entrenches an unfair divide between income from capital and labour, widening wealth inequality. This proposal places capital gains on the same footing as wages. Taxpayers already keep detailed records of expenses related to their assets; this system merely applies that rigour consistently and equitably.